U.S. equity futures edged higher on Thursday, reflecting a wave of relief among investors after President Donald Trump reversed his earlier threat to impose new tariffs on multiple European countries over contentious demands related to Greenland. Reports indicate the U.S. and NATO plus European leaders engaged in dialogue resulting in an initial but vague "framework of a future deal." The development prompted a modest recovery in risk assets and a retreat in gold prices from historic highs.
As of 03:00 ET, Dow futures increased by 61 points or 0.1%, S&P 500 futures rose 20 points or 0.3%, while Nasdaq 100 futures advanced 117 points, equating to 0.5%. Equities on Wall Street had rebounded on Wednesday, clawing back from the largest decline seen since October in the previous session, buoyed by Trump’s declaration of a "framework of a future deal" negotiated with the NATO alliance concerning Greenland.
Trump, who had been consistently threatening new levies on imports from eight European nations starting February 1 unless the U.S. was granted ownership of Greenland, clarified he would not enact those duties. Investors concurrently absorbed an upsurge in corporate earnings as the quarterly reporting period gained momentum. United Airlines shares climbed more than 2% following a better-than-expected fourth-quarter profit report, whereas Netflix shares fell over 2% after issuing soft forward guidance.
Trump’s sudden policy reversal reportedly emerged after intensive negotiations with NATO and European officials, diffusing concerns over heightened tensions that might have further strained transatlantic relations. On social media, Trump described the potential agreement as "a great one for the United States of America" and for all NATO nations, contingent on its finalization. However, he offered minimal details aside from noting ongoing discussions about a proposed "Golden Dome" defense initiative related to Greenland.
According to European officials knowledgeable about the talks, as reported by the Wall Street Journal, focal points of the negotiations include a prospective U.S. agreement with Denmark for troop deployments at military bases on Greenland and an expansion of European security operations across the Arctic. The United States is reportedly set to secure the first right of refusal on Greenland’s mineral resources. These resources contain significant rare earth elements vital to diverse industries and have been pivotal in recent U.S. trade dialogues, notably concerning China.
During remarks at the World Economic Forum’s annual gathering in Davos, Switzerland, earlier Wednesday, Trump indicated a military invasion of Greenland was not being contemplated. The easing of geopolitical concerns triggered a risk-on sentiment in financial markets, accompanied by a stronger U.S. dollar. Analysts at ING noted in a client briefing that while the Greenland deal might require further scrutiny, attention is likely to pivot toward macroeconomic influences ahead of an upcoming Federal Reserve meeting.
Gold prices tapered slightly in European trading hours on Thursday, stepping back from the $4,900 per ounce peak struck the previous session. Spot gold dipped 0.1% to $4,826.25 an ounce, with U.S. gold futures declining 0.2% to approximately $4,826.39 per ounce. The precious metal’s rally, exceeding 6% over three sessions fueled by geopolitical fear linked to the Greenland dispute and tariff uncertainties, had thrust prices near the psychologically significant $5,000 level as investors sought a safe haven.
In technology sector news, Intel is scheduled to release its earnings report after market close on Thursday. Under CEO Lip-Bu Tan’s stewardship, Intel has pursued cost reductions and financial strengthening to face mounting competition in the PC and server CPU markets. Market observers are particularly attentive to Intel’s progress breaking into the artificial intelligence chip segment. The company strengthened its position with a $5 billion investment from Nvidia and backing from SoftBank and the U.S. government. Early this month, Intel unveiled a new AI chip aimed at laptop applications, seeking to reassure investors about products based on next-generation manufacturing technology.
Additional earnings releases on Thursday include consumer goods giant Procter & Gamble and jet engine manufacturer GE Aerospace, both representing key sectors in the economy.
On the economic data front, market participants await the U.S. personal consumption expenditures (PCE) price index for November. This inflation gauge, watched closely by Federal Reserve officials, is forecasted to show a steady 0.2% monthly rise and an annualized rate of 2.8%. Recent Labor Department figures indicated stable headline consumer price inflation for December with a modest softening in core measures. Analysts from ING suggest the PCE report could reinforce perceptions of subdued inflationary pressures, a crucial element influencing Federal Reserve interest rate decisions.
Employment trends remain a focal point today with the release of weekly jobless claims data. Last week’s filings dropped below 200,000, underscoring a resilient labor market, a key factor for monetary policy considerations.